Financial Apocalypse Accelerates As Middle East Stocks Crash

Financial Apocalypse Accelerates As Middle East Stocks Crash

It looks like it is going to be another chaotic week for global
financial markets. On Sunday, news that Iran plans to dramatically ramp
up oil production sent stocks plunging all across the Middle East.
Stocks in Kuwait were down 3.1 percent, stocks in Saudi Arabia
plummeted 5.4 percent, and stocks in Qatar experienced a mammoth 7
percent decline.

And of course all of this comes in the context of a much
larger long-term decline for Middle Eastern stocks. At this point,
Saudi Arabian stocks are down more than 50 percent from their 2014
highs. Needless to say, a lot of very wealthy people in Saudi Arabia
are getting very nervous.

Could you imagine
waking up someday and realizing that more than half of your fortune had
been wiped out? Things aren t that bad in the U.S. quite yet, but it
looks like another rough week could be ahead. The Dow, the S&P 500
and the Nasdaq are all down at least 12 percent from their 52-week
highs, and the Russell 2000 is already in bear market territory.

Hopefully this week will not be as bad as last week, but events are starting to move very rapidly now.

Much
of the chaos around the globe is being driven by the price of oil. At
the end of last week the price of oil dipped below 30 dollars a barrel,
and now Iran has announced plans to add 1 million barrels to its daily
crude production &

Iran could get more than
five times as much cash from oil sales by year-end as the lifting of
economic sanctions frees the OPEC member to boost crude exports and
attract foreign investment needed to rebuild its energy industry.

The
Persian Gulf nation will be able to access all of its revenue from
crude sales after the U.S. and five other global powers removed
sanctions on Saturday in return for Iran s curbing its nuclear program.
The fifth-biggest producer in the Organization of Petroleum Exporting
Countries had been receiving only $700 million of each month s oil
earnings under an interim agreement, with the rest blocked in foreign
bank accounts.

Iran is striving to add 1
million barrels to its daily crude production and exports this year amid
a global supply glut that has pushed prices 22 percent lower this
month.

It doesn t take a genius to figure out what this is going to do to the price of oil.

The
price of oil has already fallen more than 20 percent so far in 2016,
and overall it has declined by more than 70 percent since late 2014.

When
the price of oil first started to fall, a lot of people out there were
proclaiming that it would be really good for the U.S. economy. But I
said just the opposite. And of course since that time we have seen an
endless parade of debt downgrades, bankruptcies and job losses.

130,000
good paying energy jobs were lost in the United States in 2015 alone
because of this collapse, and things just continue to get even worse.
At this point, some are even calling for the federal government to
intervene. For example, the following is an excerpt from a CNN article
that was just posted entitled "Is it time to bail out the U.S. oil
industry?"...

The
epic crash in oil prices has wiped out tens of thousands of jobs,
caused dozens of bankruptcies and spooked global financial markets.

The
fallout is already being felt in oil-rich states like Texas, Oklahoma
and North Dakota, where home foreclosure rates are spiking and economic
growth is slowing.

Now there are calls in at least some corners for the federal government to come to the rescue.

Is it just me, or is all of this really starting to sound a lot like 2008?

And
of course it isn t just the U.S. that is facing troubles. The global
financial crisis that began during the second half of 2015 is rapidly
accelerating, and chaos is erupting all over the planet. The following
summary of what we have been seeing in recent days comes from Doug
Noland&

The world has changed significantly
perhaps profoundly over recent weeks. The Shanghai Composite has
dropped 17.4% over the past month (Shenzhen down 21%). Hong Kong s Hang
Seng Index was down 8.2% over the past month, with Hang Seng Financials
sinking 11.9%. WTI crude is down 26% since December 15th.

Over
this period, the GSCI Commodities Index sank 12.2%. The Mexican peso
has declined almost 7% in a month, the Russian ruble 10% and the South
African rand 12%. A Friday headline from the Financial Times: Emerging
market stocks retreat to lowest since 09.

Trouble
at the "Periphery" has definitely taken a troubling turn for the worse.
Hope that things were on an uptrend has confronted the reality that
things are rapidly getting much worse. This week saw the Shanghai
Composite sink 9.0%. Major equities indexes were hit 8.0% in Russia and
5.0% in Brazil (Petrobras down 9%). Financial stocks and levered
corporations have been under pressure round the globe.

The
Russian ruble sank 4.0% this week, increasing y-t-d losses versus the
dollar to 7.1%. The Mexican peso declined another 1.8% this week. The
Polish zloty slid 2.8% on an S&P downgrade ("Tumbles Most Since
2011"). The South African rand declined 3.0% (down 7.9% y-t-d). The yen
added 0.2% this week, increasing 2016 gains to 3.0%. With the yen up
almost 4% versus the dollar over the past month, so-called yen carry
trades are turning increasingly problematic.

Closer to home, the crisis in Puerto Rico continues to
spiral out of control. The following is an excerpt from a letter that
Treasury Secretary Jack Lew sent to Congress on Friday&

Although
there are many ways this crisis could escalate further, it is clear
that Puerto Rico is already in the midst of an economic collapse&

Puerto
Rico is already in default. It is shifting funds from one creditor to
pay another and has stopped payment altogether on several of its debts.
As predicted, creditors are filing lawsuits. The Government Development
Bank, which provides critical banking and fiscal services to the central
government, only avoided depleting its liquidity by halting lending
activity and sweeping in additional deposits from other Puerto Rico
governmental entities. A large debt payment of $400 million is due on
May 1, and a broader set of payments are due at the end of June.

It
isn t Michael Snyder from The Economic Collapse Blog that is saying
that Puerto Rico is "in the midst of an economic collapse".

That is the Secretary of the U.S. Treasury that is saying it.

Those that have been eagerly anticipating a financial apocalypse are going to get what they have been waiting for.

Right now we are about halfway through January, and this is the worst start to a year for stocks ever.

The
Dow is down a total of 1,437 points since the beginning of 2016, and
more than 15 trillion dollars of stock market wealth has been wiped out
globally since last June.

Unfortunately, there are still a lot of people out there that are in denial.

There
are a lot of people that still believe that this is just a temporary
bump in the road and that things will return to "normal" very soon.

They
don t understand that this is just the beginning. What we have seen so
far is just the warm up act, and much, much worse is yet to come.

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About Me

ROLAND SAN JUAN was a researcher, management consultant, inventor, a part time radio broadcaster and a publishing director. He died last November 25, 2008 after suffering a stroke. His staff will continue his unfinished work to inform the world of the untold truths. Please read Erick San Juan's articles at: ericksanjuan.blogspot.com This blog is dedicated to the late Max Soliven, a FILIPINO PATRIOT.
DISCLAIMER - We do not own or claim any rights to the articles presented in this blog. They are for information and reference only for whatever it's worth. They are copyrighted to their rightful owners.
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